From May 15th to 17th, the CCFA New Consumption Forum - 2024 China Convenience Store Conference was held in Hangzhou. The conference brought together the heads of many industry leaders in the national and regional markets, as well as industry experts, to discuss how to better adapt to market changes in the new consumption era and explore a better development path for chain convenience stores. Focusing on the theme of "accelerating the development of new quality productivity of convenience stores", everyone discussed the future development plan of the industry.
At present, convenience stores are entering a critical stage of transformation and upgrading, and many convenience store companies in the industry are winning the development opportunities of the times through their own innovative practices.
"Innovation has always been the core driving force for development, and it is necessary to leverage the huge market with the minimum cost." At the plenary meeting on the morning of May 17, Tong Guowei, assistant president of Shanghai Fumanjia, said in his speech that enterprises must seek innovation, change, survival and victory, which is particularly important for convenience store enterprises. Tong Weiguo shared the innovations of FamilyMart in 2023 with the participants in depth around the five aspects of content co-creation, fifth-generation stores, late-night canteens, membership upgrades, and diversified franchises.
First, content co-creation marketing, such as the whole family collaborates with platforms such as Douyin and Xiaohongshu to link brand/IP content co-creation to create differentiated content output. Different from other live streaming models, FamilyMart's live streaming is for consumers to buy coupons online and write them off offline. Last year, the family conducted more than 30 live broadcasts, with more than 500 million exposures and more than 1 million offline stores.
Secondly, in the face of changes in consumer trends after the epidemic, FamilyMart launched the fifth-generation store in July last year to enhance the three values of products, emotions and services. For example, self-service facilities are added, consumers are convenient, and freshly cooked and cooked to increase urban fireworks. Last year, the family proposed the concept of five meals a day, in addition to breakfast, lunch and dinner, there are also more flexible afternoon tea and supper.
The third is to launch a late-night canteen to eliminate the off-season. Last year, the family cooperated with the Shanghai "Nightlife Festival", and the content and form continued to innovate, in addition to the Douyin live broadcast, the family also cooperated with the launch of a small wine companion set.
Fourth, in terms of members, last year, the whole family upgraded the exclusive membership system, from the annual fee of 100 yuan to 128 yuan, and the exclusive membership rights and interests system was newly upgraded, including 88% off the whole site, card opening gift packages, and exclusive activities for members, such as lucky draws.
In terms of franchise, through the brand advantages, supply chain, and system support of the whole family, we pursue Japanese businessmen (providing brand power, commodity power, operation power, and digital operation capabilities) to solve the business problems of franchisees. Last year, the whole family also launched a thrifty franchise system, such as the franchisee Quantou, he can share 85% of the gross profit; Franchisees can get 75% of the gross profit if they are half-voted; Franchisees invest less, only invest in franchise money and margin, and can also share 65% of the gross profit. In this system, franchisees always get the lion's share.
Mr. Shiishu Miyake, President of Lawson China, shared Lawson's development strategy. According to reports, as of March 20, 2024, Lawson has entered 17 provinces/municipalities directly under the central government, with stores covering 124 cities. In 2023, China Lawson's turnover (including tax) will reach about 14.2 billion yuan.
Miyake observed that consumers have shifted from tiptoe consumption in the past to more stable consumption, and more cost-effective products will still sell well. At the same time, the value of brick-and-mortar stores has been reassessed, and small-scale specialty stores are growing rapidly and competition is becoming more and more diverse. At present, Lawson's average order value has also decreased. The fragmentation of sales by food delivery, promotions on Douyin or other platforms, and the expansion of retail discount stores have led to a decline in the performance of stores that cannot win in the competition. In his view, the role of convenience stores has evolved from "what you want, when you want it, where you want it", to "what you want, when you want it, where you want it". Therefore, the reason for the failure to achieve the expected performance cannot simply be attributed to the rise of e-commerce or the downturn in consumption and economy.
In addition, convenience stores need to evolve and become more convenient by providing convenience in terms of time, peace of mind, and convenience in products. Lawson redefines convenience by developing new products, new categories, new technologies, and providing new services and models.
Miyake emphasized that in order to win the trust of consumers, franchisees, suppliers, and employees, Lawson must not compromise on value, cost-effectiveness, and quality, and provide competitiveness for franchisees, pay suppliers in a timely manner, and create a pleasant working environment for employees. But in the end, it's the power of the product, for example, in Japan, where many dishes can be made in-store. Although China has a question of whether its laws and regulations allow it, if it is not able to provide more authentic and authentic dishes, it may not be able to win the competition. Lawson is also exploring partnerships with food delivery platforms such as Meituan to meet consumer demand. In addition, Lawson is committed to creating a "happy convenience" that allows consumers to enjoy themselves in the store.
Miyake said that it is necessary for Lawson to rebuild a store that can be exciting and exciting, and the goal is to make Lawson the number one brand recommended by customers, society, and partners. and contribute to a sustainable society. "As a convenience store, we will continue to maintain a sense of crisis for all of us, and if it is not convenient, we have no reason to exist."
Wu Minyi, general manager of Xinjiayi, brought a speech entitled "The Attempt of Comparing Quality and Price to Convenience Stores in the County". According to reports, at present, the store layout of Xinjiayi is mainly in Central China and Hunan, and gradually tries to open stores in Jiangxi and Hubei. There are about 1,000 stores. In 2023, the average daily sales will reach 7,500 yuan. In the county seat, the performance indicators of Xinjiayi stores even exceed the average in Changsha, and all stores are open 24 hours. Previously, Wu Minyi believed that convenience stores in the county market are the most important quality-price ratio, quality first, price second, and convenience third. However, after his own research, he found that in the county, the convenience of convenience stores is still very important.
According to reports, for the county market, Xinjiayi has adopted a people-friendly strategy in commodity pricing, providing cost-effective goods, such as 3.9 yuan a pound of fresh beer, 500 ml of fresh milk is priced at 4.9 yuan, 520 ml of ice coffee is priced at 4.9 yuan, and ice cups and ice bags are also sold, these products have been welcomed by consumers in the county market. In addition, Xinjiayi has also tried to market through mini-programs and social media platforms such as Douyin, and the results have been good. In terms of logistics and supply chain, Xinjiayi has invested a lot of resources to establish a refrigerated and frozen logistics center to support the daily distribution demand of frozen and refrigerated goods in stores. At present, Xinjiayi has a logistics center that can support the refrigeration of 2,000 stores, and the second phase is under construction, which is an industrial park that can support the refrigeration and freezing of 4,000 stores.
According to reports, judging from the sales data of Xinjiayi's stores in the county market, the proportion of its cold chain goods, night sales, and online sales is good. The average annual profit of the county store franchise store is about 300,000 yuan. The number of stores opened has doubled, and there are more franchisees who have reopened stores.
In the face of the current fierce competition in the market, the positioning of Xinjiayi is to be the most warm and quality-to-price retail. Provide consumers with high quality-to-price ratio products. Help franchisees make money and create large single products and gods. In the end, Wu Minyi summed up the experience of Xinjiayi's attempt in the county as follows: "forget about convenience stores, serve customers, and do a good job in retail".
Yan Qian, Director and General Manager of 7-Eleven China, delivered a speech entitled "Stick to the Foundation, Safeguard Consumption".
She said that although the growth rate of convenience stores in China's retail market has slowed down, convenience stores still have faster growth opportunities compared to other formats in the retail industry. However, she also mentioned the crises and challenges in the industry, such as the impact of the epidemic, the average daily sales per store of convenience stores have declined in recent years. She believes that the competition faced by the convenience store industry has an external environment, such as the development of food delivery and instant retail, which has weakened the advantages of convenience stores in the near field and immediacy, and diverted customers' consumption demand. But we must also reflect on our own internal cultivation.
By comparing the situation of 7-Eleven Japan, Yan Qian emphasized the importance of precise positioning of target customers and a deep understanding of their lifestyles to increase business performance. She mentioned that 7-Eleven Japan has formulated a strategy for the growth of its convenience store business with food as the core, as well as an intensification of near-field consumption. For example, in terms of products, the supply of convenient, high-quality food accompaniment dishes and frozen dishes has been increased. In terms of stores, the area of the new pilot store has been expanded from about 130 square meters to 300-500 square meters, and the number of items has expanded from the original 2,500 to about 5,000, strengthening the FF goods and fresh categories. In addition, in terms of price, Japan's 7-Eleven's sense of value in the price band of goods is also expanding. For example, for basic food with high price sensitivity, the 7P category of the red label has been launched, and the 7P products of the gold label have been launched for the small luxury of famous chefs. The endogenous driving force for continuous innovation comes from the brand DNA of 7-Eleven, which constantly creates new value and guides customer needs.
According to reports, in China, 7-Eleven is based on the franchise model, with the 24 words of "implementing the basics, responding to changes, each with its own wisdom, each with its own strength, seeking to create together, sharing and win-win" The practice of brand genes in China is interpreted. As for "implementing the basics and responding to changes", Yan Qian emphasized that the 7-Eleven know-how system is its foundation, which can support the rapid opening of stores and supply chain construction from 0 to 1 in various places.
In addition, through multi-level support such as daily centralized training, unified support, and customized solutions, we can better adapt to the needs of local markets while implementing know-how in various regions. For example, product power is the core competitiveness of 7-Eleven, and 7-Eleven China continues to implement know-how output of quality improvement to various regions to achieve the longevity of best-selling products. At the same time, around online sales, 7-Eleven China has also enriched this part of the know-how in terms of services, systems, operations, etc., and achieved a significant increase in online sales.
At the meeting, Yan Qian also shared the innovative cases of 7-Eleven in different regions. This is the best practice of 7-Eleven's "each with its own wisdom, each with its own strength", to feed back the know-how.
Finally, she said that under the premise of the general environment and multi-channel competition, especially the brands based on the franchise model, whether at home or abroad, must "seek co-creation, share and win-win" on the brand platform, in order to truly stick to the foundation, provide consumers with better services, goods, and create better value.
In the finale of the meeting, Wang Hongtao, vice president and secretary general of China Chain Store & Franchise Association, as the moderator, had an in-depth discussion with Yang Wenbin, chairman of Tang Jiu, Yang Changbao, chairman of Fujian Wanjia, Shishu Miyake, president of Lawson China, and Tong Weiguo, assistant president of Shanghai Fumanjia, on the theme of how to build the ultimate supply chain for chain brands.
At this meeting, there were also wonderful sharing from equipment suppliers, solution providers, and investment institutions.
Huarong Yu, Head of R&D at Ecolab Fast Casual Dining, gave a presentation titled "ReadyDoseTM: Innovation in Change".
Wang Bin, Director of the Marketing Department of Key Accounts of COFCO Fulinmen, delivered a speech entitled "New Opportunities for Big Brands and Small Categories".
Chen Chen, the head of marketing of Weidian 24, brought a speech entitled "Weidian 24, let the store be open 24 hours".
Zhang Xinzhao, Founding Partner of Qicheng Capital, delivered a speech entitled "The Evolution of Convenience Store Formats and the Deepening of Food Supply Chain in the Buyer's Market".